Cumulative catastrophe bond issuance passes $100bn

The catastrophe bond and insurance-linked securities (ILS) market has reached a new milestone, as strong demand from investors and sponsors has taken 2018 issuance to near $7 billion already, lifting total cumulative issuance since the market began passed the $100 billion mark, according to Artemis’ data on the market.
The impressive pace of growth in cat bonds and related ILS over the last two years has driven significant expansion of the market, as the use of securization and capital market investor backing for reinsurance and retrocession lifted cumulative issuance to this new three-digit billion high.

In fact, cumulative issuance by Artemis’ reckoning only stood at $80 billion as recently as January 2017, meaning the market has witnessed the $20 billion in issuance to take it to the $100.09 billion it sits at today in a period of just over sixteen months.

Perhaps the most impressive indicator of the robust and healthy ILS market right now can be found if we look back over the last year and a half of cat bond issuance to find the peak twelve months.

Artemis’ data shows that there is a twelve month stretch where more than $14 billion of new cat bonds were issued, the highest for any twelve months since we began tracking the cat bond and ILS market way back in 1996.

There is another $1 billion or more of new cat bond transactions also set to complete before the end of May and sources have said to expect some more before the end of the first-half of 2018 as well.

So right now the cat bond and related ILS market is already destined to achieve $8 billion+ of issuance for the first-half of 2018, a pace that could set the market on its way to a new annual record, if issuance is strong later in the year as well.